Testimony of Ben Sprague, City Councilor, City of Bangor

Before the

Joint Standing Committee on Appropriations and Financial Affairs and

Taxation

Regarding the Proposed Budget for FY 18 and FY 19

February 6, 2017

Sen. Hamper, Rep. Gattine, Sen. Dow, Rep. Tipping, and members of the Joint Standing
Committees on Appropriations and Financial Affairs and Taxation, my name is Ben Sprague and
I am a member of the Bangor City Council and Chairperson of the Citys Finance Committee. I
am here today to support a budget that protects and restores Revenue Sharing for
municipalities.

Cities and towns, including Bangor, have been under an immense amount of pressure in the
last few years due to cost shifts and unfunded mandates from the state and federal levels of
government. Municipalities are responsible for more services and face more regulatory
obligations than ever before. At the same time, the dollars we need to meet these increased
burdens have been shifted away from us, primarily in the form of cuts to the revenue sharing
program, which has enjoyed statewide popularity in particular among Maine property
taxpayers.

Revenue sharing is a key part of our budget in the City of Bangor. Municipalities, as you know,
are not permitted by state statute to have a local option sales tax of any kind, a meals and
lodging tax, or a local income tax. We are therefore almost entirely dependent on the property
tax, which is an antiquated and inflexible method of funding local government.

A properly functioning business depends on diverse revenue streams, liquidity, and flexibility;
using property tax dollars as the primary mechanism to fund local government, on the other
hand, gives us none of these things. The costs of services tend to increase annually due to
inflation and there are new costs due to the previously mentioned shifting of burdens and
unfunded mandates, but property values do not increase in the same manner. The result has
been a steady increase in the mill rate in the City of Bangor and in other communities around
the state.

On average, the failure to adequately fund the revenue sharing program according to state
statute has had an impact of $1.18 per year on the citys mil rate over the last four years. This
represents $11.5 million to Bangor property taxpayers in just four years, including $3 million in
FY 2017 alone. Property taxpayers, many of them elderly and living on a fixed income and
others who are just barely getting by, are struggling.

There is a perspective that exists that some communities, such as Bangor, simply need to
tighten their belts and make some hard decisions. The revenue sharing program itself has been
called a form of welfare, by our governor. This is not an accurate, informed, or helpful point
of view.

In the City of Bangor, we have laid off more than 50 city employees in recent years. We have
privatized some city services and cut others altogether. We do not provide retiree health
benefits. We do not offer the defined benefit pension anymore. We closed higher benefit
health plans. We require employees to contribute 25% towards health premium costs. We
implemented service fees to fund unfunded storm water mandates by the federal government.
We have continually invested in technology and energy efficiencies to lower operating costs.

For the people who say local government is bloated, my view has been that there is very little
left at the municipal level of government to cut. And I have found that it is very easy to be
against wasteful spending, but it is much harder to decide what to actually cut. When we
engage with our citizenry in Bangor, which we try to do frequently especially during budget
season, about the challenges of putting together a local budget, even the most fiscally
conservative among us tends to balk at the next level of cuts, which would include police
officers, firemen, teachers, and much needed road repairs among other items. While people
are generally opposed to government spending, they tend to like and depend upon the things
that it buys and they are sick and tired of their property taxes going up every year to pay for
them.

What has Bangor bought with our revenue sharing dollars? Beyond basic, expected, and
mandated municipal services, Bangor has invested heavily in its own economic development,
which helps us and the state. We are an economic bright spot for Maine, and revenue sharing
has provided us with a steady revenue stream to be able to make various projects work. We
have attracted new businesses to the area and helped others expand. Our Waterfront and
Cross Insurance Center have been recognized far and wide for their economic impact on the
region and state as a whole. Bangor is now the youngest community in the state by median
age and we have been recognized by Forbes and AARP as a great place to retire.

Please let us build a partnership with you around economic development by providing
communities like Bangor with the funds needed to maintain services and continue to grow
economically. On behalf of the City of Bangor and its property taxpayers, I urge you to
preserve and restore the Revenue Sharing program to its statutory requirements. Thank you for
your time and attention.